US: Key data for next week - Danske Bank

Analysts from Danske Bank, present next week key economic reports in the US, that include on Friday, the release of the official employment report. 

Key Quotes: 

“In the US, the most important data release next week will be the labour market report for June, due to be released on Friday. Progress in the labour market slowed somewhat in the first five months of 2017 compared to 2016, with an average monthly increase in non-farm payroll of 162,000 compared to 187,000 in 2016. Whether or not this is a permanent slowdown in job growth remains to be seen. However, we believe that we could see a decent number for June as the ADP employment figures showed stronger job creation in May than the non-farm payroll and there is a tendency for the numbers to correct for differences.”

“We estimate that employment rose 180,000 in June with the service sector as the main contributor with an expected monthly increase of 150,000 and manufacturing contributing 15,000. The unemployment rate has fallen from 4.8% in January to 4.3% in May. However, a large part of this fall has been driven by falling labour market participation and as we do not expect this to continue, we estimate the unemployment remained unchanged at 4.3% in June.”

“We expect average hourly earnings increased 0.3% m/m, which would imply an increase of 2.6% y/y. Note that we will get a first impression of labour market strength on Thursday when we receive the ADP employment figures for June.”

“On Monday, ISM manufacturing for June is due to be released. Manufacturing PMI suggests further decreases in ISM, which is also still too high in our view. Thus, we estimate ISM manufacturing fell to 54.0 in June. Finally, the minutes from the FOMC meeting in June are due out on Wednesday. We will pay attention to these as they may shed some light on when the Fed is planning to start quantitative tightening.”